Community Influences On Strategy-As-Practice In Family Businesses

Abstract

The strategy-as-practice perspective concerns ways of doing that fall into specific routines and works patterns, which may vary from firm to firm in an industry, and between different types of firms, while at the same time being influenced by more institutionalized patterns. Strategy-as-practice enables understanding of the manner in which emergent strategy – one of the two legs, the other being deliberate strategy (Mintzberg and Waters, 1985) - takes place through actions of organizational role holders immersed in their environment. Communities enact identities in social and family life, drawing upon idioms of inter-generationally received recipes in kinship and sentient boundaries. Family dominance in business manifests itself through joint family and extended community ties that reinforce values, norms, beliefs and attitudes. The central question taken up for the study is: Do community influences affect strategy-as-practice in family businesses? Organizations are a social arena within which the underpinnings of emotional inheritance and its rational connections are enacted and continuously shaped by past and present experiences. As human organizations are best understood by involving members of the system as co-inquirers, this study invoked action research as its methodology. Firms, whose founders hailed from Marwari, Kshatriya, Sindhi, Parsee, Muslim, and Jain communities and one Public Sector Unit under Government of India participated in the study. The study findings indicate that strategy-as-practice in Indian family business is strongly influenced by the founder-promoter of the business at the time the business was instituted as a closely held family business. Subsequent changes in the size of the business, even when the entity raises money from capital markets and gets its shares listed on the stock exchange, thereby having to comply with statutory norms, do not change the essential nature of original practices. The findings indicate that these practices continue to influence – constrain or enable – the implementation of various courses of strategic actions derived through deliberate planning route. This study also finds that practices can vary to a large extent within an organization and its sub units if the sub units are spaced out in time and space and the team responsible for the new sub unit creation are different.